Recently published research from Business Monitor International, "Ukraine Pharmaceuticals & Healthcare Report Q2 2013", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 05/09/2013 -- Ukraine's legislative environment is continuing to hamper access to market for foreign drugmakers and cause tensions between authorities and the industry. Despite being postponed by three months, to the start of March 2013, the import licensing law No 5038-VI will undoubtedly create severe drug shortages and the withdrawal of drug companies from Ukraine, as it stipulates that all pharmaceutical importers must obtain a special new licence. Given factors such as the lack of resources to implement the issuing of new licences, we believe it will also exacerbate social unrest and add fuel to the already tense political situation. We expect the law to eventually be watered down, given that key trading partners will certainly lodge complaints to the World Trade Organisation (WTO), while domestic drugmakers that rely on imported active pharmaceutical ingredients will apply pressure at home.
Headline Expenditure Projections
- Pharmaceuticals: UAH29.51bn (US$3.65bn) in 2012 to UAH32.93bn (US$3.58bn) in 2013; +11.6% in local currency terms and -0.2% in US dollar terms. Forecast slightly lower from Q113, on account of worsening macroeconomic outlook.
- Healthcare: UAH104.89bn (US$12.98bn) in 2012 to UAH114.01bn (US$12.39bn) in 2013; +8.7% in local currency terms and -4.5% in US dollar terms. Forecast slightly lower from Q113, on account of worsening macroeconomic outlook.
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Risk/Reward Ratings: Ukraine's Pharmaceutical Risk/Reward Rating (RRR) score for Q213 is unchanged from the previous quarter. This is also the case for all other countries in BMI's proprietary system that ranks pharmaceutical markets according to attractiveness to multinational drugmakers. A minor re-weighting of one of the RRR components is being implemented to improve the tool, and the adjusted scores for all markets will be published in the Q313 updates of the Pharmaceuticals & Healthcare reports. Ukraine has an RRR score of 49.4 out of 100, making it the 12th most attractive pharmaceutical market in the Central and Eastern Europe (CEE) region, which covers 20 key countries.
Key Trends & Developments
- In February 2013, the Ukraine Ministry of Health announced plans to draft regulations for enabling the Cabinet to authorise compulsory licencing. This law would enable the Ukrainian government to force patent-holders to licence out their products to domestic drugmakers in the event of a national health emergency or if there is a pressing medical need. Similarly, domestic drugmakers can appeal to the state and request a rate reduction for licencing patented drugs. This would effectively give the government the power to set a royalty rate for patented drugs in the event of a dispute between domestic drugmakers and foreign multinationals. We believe the potential for abuse of this provision is high, especially if initiated by politically-connected domestic drug companies.
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